Do You Pay Zakat if Your Mortgage Exceeds Taxable Assets?

If your mortgage exceeds your taxable assets, Zakat is not obligatory. 

The general principle is that debts can be deducted from your Zakatable assets when calculating Zakat. If the debt exceeds your assets, you are not required to pay Zakat. 

However, if your assets remain above the nisab after subtracting the mortgage, you would need to pay Zakat on the remaining wealth.

Different schools vary slightly, but debts, whether immediate or deferred, generally reduce Zakatable wealth. If your remaining wealth, after the debt is subtracted, exceeds the nisab, Zakat becomes due on the surplus.

For those following the Hanafi school, there are three main opinions:

1. Both immediate and deferred debts prevent Zakat.
2. Only immediate debts are deducted for Zakat calculation.
3. Only debts with a firm repayment intention are deducted, while others are counted in the Zakatable assets.

If the mortgage exceeds your taxable assets and you are unable to repay the mortgage immediately, you will not pay Zakat. However, if there is any amount left after the debt exceeds the nisab, you would be required to pay Zakat at 2.5% of the excess.

And Allah knows best!